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Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(☒) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

(☐) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 1-8022

CSX CORPORATION


(Exact name of registrant as specified in its charter)
Virginia						62-1051971
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

500 Water Street	15th Floor	Jacksonville	FL		32202	904	359-3200
(Address of principal executive offices)					(Zip Code)	(Telephone number, including area code)

			No Change
(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class				Trading Symbol(s)		Name of exchange on which registered
Common Stock, $1 Par Value				CSX		Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes (X) No ( )

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes (X) No ( )

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company (as defined in Exchange Act Rule 12b-2).

Large Accelerated Filer (X) Accelerated Filer ( ) Non-accelerated Filer ( ) Smaller Reporting Company (☐) Emerging growth company (☐)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ( )

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes (☐) No (X)

There were 1,976,131,035 shares of common stock outstanding on September 30, 2023 (the latest practicable date that is closest to the filing date).

CSX Q3 2023 Form 10-Q p.1

CSX CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

INDEX


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	3

	Consolidated Income Statements (Unaudited) - Quarters and Nine Months Ended September 30, 2023 and September 30, 2022	3

	Condensed Consolidated Comprehensive Income Statements (Unaudited) - Quarters and Nine Months Ended September 30, 2023 and September 30, 2022	3

	Consolidated Balance Sheets - At September 30, 2023 (Unaudited) and December 31, 2022	4

	Consolidated Cash Flow Statements (Unaudited) - Nine Months Ended September 30, 2023 and September 30, 2022	5

	Consolidated Statement of Changes in Shareholders' Equity (Unaudited) - Quarters and Nine Months Ended September 30, 2023 and September 30, 2022	6

	Notes to Consolidated Financial Statements (Unaudited)	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	40

Item 4.	Controls and Procedures	40

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	41

Item 1A.	Risk Factors	41

Item 2.	CSX Purchases of Equity Securities	41

Item 3.	Defaults Upon Senior Securities	42

Item 4.	Mine Safety Disclosures	42

Item 5.	Other Information	42

Item 6.	Exhibits	43

Signature		44

CSX Q3 2023 Form 10-Q p.2

CSX CORPORATION

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENTS (Unaudited)

(Dollars in millions, except per share amounts)


	Third Quarters				Nine Months
	2023		2022		2023		2022

Revenue	$	3,572	$	3,895	$	10,977	$	11,123
Expense
Labor and Fringe	752		759		2,216		2,135
Purchased Services and Other	689		664		2,061		1,986
Depreciation and Amortization	399		378		1,194		1,107
Fuel	349		438		1,025		1,215
Equipment and Other Rents	94		104		266		299
Gains on Property Dispositions	(6)		(27)		(26)		(183)
Total Expense	2,277		2,316		6,736		6,559

Operating Income	1,295		1,579		4,241		4,564

Interest Expense	(203)		(193)		(605)		(543)
Other Income - Net	34		37		106		89
Earnings Before Income Taxes	1,126		1,423		3,742		4,110

Income Tax Expense	(280)		(312)		(913)		(962)
Net Earnings	$	846	$	1,111	$	2,829	$	3,148

Per Common Share (Note 2)
Net Earnings Per Share, Basic	$	0.42	$	0.52	$	1.40	$	1.46
Net Earnings Per Share, Assuming Dilution	$	0.42	$	0.52	$	1.40	$	1.46


Average Shares Outstanding (In millions)	1,994		2,122		2,022		2,156
Average Shares Outstanding, Assuming Dilution (In millions)	1,999		2,126		2,027		2,161

CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS (Unaudited)

(Dollars in millions)


	Third Quarters				Nine Months
	2023		2022		2023		2022
Total Comprehensive Earnings (Note 10)	$	864	$	1,129	$	2,845	$	3,236

See accompanying notes to consolidated financial statements.

CSX Q3 2023 Form 10-Q p.3

CSX CORPORATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

(Dollars in millions)


	(Unaudited)
	September 30, 2023		December 31, 2022
ASSETS
Current Assets:
Cash and Cash Equivalents	$	1,360	$	1,958
Short-term Investments (Note 9)	79		129
Accounts Receivable - Net (Note 8)	1,399		1,313
Materials and Supplies	427		341

Other Current Assets	94		108
Total Current Assets	3,359		3,849

Properties	49,118		48,105
Accumulated Depreciation	(14,462)		(13,863)
Properties - Net	34,656		34,242

Investment in Affiliates and Other Companies	2,364		2,292
Right-of-Use Lease Asset	496		505
Goodwill and Other Intangible Assets - Net	509		502
Other Long-term Assets	466		522
Total Assets	$	41,850	$	41,912

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable	$	1,201	$	1,130
Labor and Fringe Benefits Payable	441		707
Casualty, Environmental and Other Reserves (Note 4)	133		144

Current Maturities of Long-term Debt (Note 7)	559		151
Income and Other Taxes Payable	361		111
Other Current Liabilities	239		228
Total Current Liabilities	2,934		2,471

Casualty, Environmental and Other Reserves (Note 4)	302		292
Long-term Debt (Note 7)	17,903		17,896
Deferred Income Taxes - Net	7,700		7,569
Long-term Lease Liability	487		488
Other Long-term Liabilities	570		571
Total Liabilities	29,896		29,287

Shareholders' Equity:
Common Stock, $1 Par Value	1,976		2,066
Other Capital	657		574
Retained Earnings	9,689		10,363
Accumulated Other Comprehensive Loss (Note 10)	(372)		(388)
Non-controlling Minority Interest	4		10
Total Shareholders' Equity	11,954		12,625
Total Liabilities and Shareholders' Equity	$	41,850	$	41,912

See accompanying notes to consolidated financial statements.

CSX Q3 2023 Form 10-Q p.4

CSX CORPORATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED CASH FLOW STATEMENTS (Unaudited)

(Dollars in millions)


	Nine Months
	2023		2022

OPERATING ACTIVITIES
Net Earnings	$	2,829	$	3,148
Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities:
Depreciation and Amortization	1,194		1,107
Deferred Income Taxes	111		125
Gains on Property Dispositions	(26)		(183)




Other Operating Activities	69		(52)
Changes in Operating Assets and Liabilities:
Accounts Receivable	(65)		(143)
Other Current Assets	(86)		(32)
Accounts Payable	52		166
Income and Other Taxes Payable	267		22
Other Current Liabilities	(296)		97
Net Cash Provided by Operating Activities	4,049		4,255

INVESTING ACTIVITIES
Property Additions	(1,590)		(1,437)
Purchases of Short-term Investments	(103)		(19)
Proceeds from Sales of Short-term Investments	153		9
Proceeds and Advances from Property Dispositions	35		51
Business Acquisition, Net of Cash Acquired	(31)		(223)
Other Investing Activities	(19)		(25)
Net Cash Used In Investing Activities	(1,555)		(1,644)

FINANCING ACTIVITIES
Long-term Debt Issued (Note 7)	600		2,000
Long-term Debt Repaid (Note 7)	(150)		(178)
Dividends Paid	(666)		(645)
Shares Repurchased	(2,901)		(3,710)


Other Financing Activities	25		(6)
Net Cash Used in Financing Activities	(3,092)		(2,539)

Net (Decrease) Increase in Cash and Cash Equivalents	(598)		72

CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents at Beginning of Period	1,958		2,239
Cash and Cash Equivalents at End of Period	$	1,360	$	2,311

SUPPLEMENTAL CASH FLOW INFORMATION
Issuance of Common Stock as Consideration for Acquisition	$	—	$	422

See accompanying notes to consolidated financial statements.

CSX Q3 2023 Form 10-Q p.5

CSX CORPORATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF CHANGES

IN SHAREHOLDERS' EQUITY (Unaudited)

(Dollars in millions)


Nine Months 2023	Common Shares Outstanding (Thousands)	Common Stock and Other Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income(a)		Non-controlling Minority Interest		Total Shareholders' Equity

Balance December 31, 2022	2,066,367	$	2,640	$	10,363	$	(388)	$	10	$	12,625
Comprehensive Earnings:
Net Earnings	—	—		987		—		—		987
Other Comprehensive Income	—	—		—		2		—		2
Total Comprehensive Earnings										989

Common stock dividends, $0.11 per share	—	—		(226)		—		—		(226)
Share Repurchases	(35,157)	(35)		(1,032)		—		—		(1,067)

Stock Option Exercises and Other	1,865	15		—		—		(2)		13
Balance March 31, 2023	2,033,075	$	2,620	$	10,092	$	(386)	$	8	$	12,334
Comprehensive Earnings:
Net Earnings	—	—		996		—		—		996
Other Comprehensive Income	—	—		—		(4)		—		(4)
Total Comprehensive Earnings										992

Common stock dividends, $0.11 per share	—	—		(222)		—		—		(222)
Share Repurchases	(27,434)	(28)		(835)		—		—		(863)

Stock Option Exercises and Other	712	38		(1)		—		(4)		33
Balance June 30, 2023	2,006,353	$	2,630	$	10,030	$	(390)	$	4	$	12,274
Comprehensive Earnings:
Net Earnings	—	—		846		—		—		846
Other Comprehensive Income	—	—		—		18		—		18
Total Comprehensive Earnings										864

Common stock dividends, $0.11 per share	—	—		(218)		—		—		(218)
Share Repurchases	(31,018)	(31)		(940)		—		—		(971)
Excise Tax on Net Share Repurchases	—	—		(28)		—		—		(28)

Stock Option Exercises and Other	797	34		(1)		—		—		33
Balance September 30, 2023	1,976,132	$	2,633	$	9,689	$	(372)	$	4	$	11,954

(a) Accumulated Other Comprehensive Loss balances shown above are net of tax. The associated taxes were $122 million as of December 31, 2022, $121 million as of March 31, 2023, $107 million as of June 30, 2023, and $101 million as of September 30, 2023. For additional information, see Note 10, Other Comprehensive Income.

See accompanying notes to consolidated financial statements.

CSX Q3 2023 Form 10-Q p.6

CSX CORPORATION

Next: Item 1. FINANCIAL STATEMENTS